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A MORE EQUAL PIE

Decentralisation and equitable growth: Two lessons for India from the Covid-19 pandemic

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As the summer sets in over India every year, there is an announcement that the country waits for—on how the coming monsoon will fare.

Much hinges on this prognosis, not just for the food security of the country in the coming year and the livelihoods of the millions of farming and farm labour families, but for the kick-starting of the consumption cycle that will drive the economy of the coming year. Good rains and better harvests have a direct correlation to more spending on festivals, food, clothes and everything else that can help pull up the economy.

The India Meteorological Department’s (IMD) recent announcement about 2020 receiving normal rainfall would have brought cheer to many. IMD’s announcement came on April 15, a day after the 1.3 billion population had completed one three-week lockdown period, which has now been extended for a second time till May 18.

The hope is that at a time when there is enough bad news all around, the monsoon will give reliable and steady rainfall, and not be a string of extreme weather events as it was in 2019. The hope is also that the good monsoons will also pull through the post-lockdown economic stress that had added to an already decelerating economy.

The economic impact of the pandemic and the lockdown has been bad for India, like in other countries across the world. The primary indicator is the power consumption. According to the data compiled by the Energy Policy Institute of the University of Chicago, the power consumption on April 3 was almost 19% less than an average day’s consumption in December 2019.

According to the latest report by global consulting company KPMG, the lockdown will have an adverse impact on all sectors of the Indian economy. The textile and apparel sector could reduce by 10-12%; automobile demand will continue to be muted; without fresh investments, the building sector will continue to crumble; and the aviation and tourism sector will see a meltdown worse than that following the 9/11 attacks in 2001 in the United States and the 2008 economic crisis.

At the retail consumption level, there was a sharp divide between essential goods and non-essentials. While the essentials were bought up heavily to tide over the lockdown, the non-essentials were avoided.

In fact, the lockdown also divided those consuming these essentials across the country into two. There were those who could not consume the way they did because they could not step out of their homes or order goods online. Then there were the others who did not have anything to consume since the lockdown stopped their income flow.

The grimmest picture that emerged during the lockdown of despondent domestic migrants wanting to return to their villages, but blocked at city and state boundaries. Different state governments handled the situation differently.

Altered governance dynamics

The pandemic added a new dimension in centre-state relationships, with many state chief ministers showing the leadership in dealing with the health and socio-economic issues in their areas. It forced a change in a centralised governance structure that had become the norm in the past half-decade, where decisions were taken by a few members of the central government. The national government had to discuss the response with all political parties and also the chief ministers of all the states.

The situation brought to the fore the importance of parallel decision making, where the national government announced the lockdown to promote social distancing, the state chief ministers developed the day-to-day action plans and communicated with the people. Kerala chief minister Pinarayi Vijayan’s daily press conference was watched by not only the people living in Kerala, but also their relatives in other parts of the world. These televised press meetings served both as a status report for the day, and also an action plan for the next 24 hours.

The very structure of the pandemic is such that it is better handled in a decentralised manner. Having faced two environmental and one medical crises before—the floods of 2018 and 2019 and the Nipah infection—Kerala could put this machinery developed to deal with this one. Similarly, Odisha having faced multiple extreme weather events, also had its act in place.

Kerala’s effective decentralised governance structure, going down to the village and corporation ward levels, and with the associated women’s self-help kudumbashree groups, strengthened the hands of the administration and the medical system in fighting the infection.

Centralised, but bottom-up

The decentralised will need to have equal importance with the centralised governance structures.

As the lockdown continues till May 18 with eased norms, the governance lessons that the pandemic taught can be used to pull the economy back towards normalcy. The decentralised will need to have equal importance with the centralised governance structures.

The 73rd and the 74th amendment of the constitution have put in place the three-tiered democratic governance structures in the rural and urban areas of the country. The policy framework that can effectively support state and central government action for economic recovery can come from these decentralised institutions.

The panchayats have been further strengthened through the Biodiversity Act, which has led to the establishment of the National Biodiversity Authority in Chennai, 29 state biodiversity boards (SBBs), and 249,098 biodiversity management committees (BMCs) at the rural and urban panchayat level.

While the panchayats build the roots into the state and national governance structures, the BMCs have an understanding of the natural resources and the biological diversity available at the local level through the process of having developed people’s biodiversity registers. This valuable, nuanced understanding can give a great deal of detail into the recovery process, which otherwise could again repeat the centralised, broad-brush treatment like before, which led to the current situation.

While centralised planning creates economies of scale, it also reduces the ability of regions and localities to be self-sustaining entities. Thus, supported by good rainfall, tropical weather and mid-altitude plateaus, Kerala was promoted as the best location for producing spices and cash crops for decades. However, when the pandemic forced the state borders to be closed, Kerala felt the need for foodgrain, vegetables, fruits, and poultry products, which had to come from the neighbouring states.

This provoked the chief minister to call for building food self-sufficiency in the state. It is in situations such as this that the grass-roots understanding on the availability and appropriateness of local natural resources can help in building this self-sufficiency, which can also help communities build climate resilience to deal with extreme weather events.

Prime minister Narendra Modi had also emphasised that the pandemic has taught us that we need to be self-sufficient. “It has taught us that we have to be self-reliant and self-sufficient. It has taught us that we should not look for solutions outside the country. This is the biggest lesson we have learnt. Every village has to be self-sufficient enough to provide for its basic needs. Similarly, every district has to be self-sufficient at its level, every state has to be self-reliant at its level and the whole country has to be self-reliant at its level,” he said while interacting with heads of gram panchayats (village councils) through video conferencing on the National Panchayati Raj Day on April 24.

There are multiple examples from across the country where community-led initiatives have led to improved natural resources management and improved climate resilience in smaller units such as villages and micro-watersheds. It has been successful even in chronically drought-hit regions of Marathwada in Maharashtra.

The push and pull of migration

Despite the pull of employment in the manufacturing and the service sectors if still the agricultural sector provides employment to half of those employed in the country, there is an inherent love for the land among people. If farmlands can provide improved value for farm families, then there would be lesser migration within the country, and the situation of starving migrants on the road as witnessed during the early days of the lockdown may not be as stark in the future.

There are two reasons why people migrate from their villages into urban areas. One, is the push factor, with the agricultural activities not being able to support them. The farmers in the country had articulated this issue through protests before the national elections of 2019. Adding to this are the uncertainty and losses that extreme weather events induced by climate change that the rural communities have been facing. Two, is the pull factor—the attraction of earning better income in the manufacturing and service-sector jobs.

Improved farm incomes and better resilience to climate-induced uncertainties will encourage more people to stay back in their villages.

If the push factors are controlled, there would be a reduction of domestic migration within India. For instance, intervention in Kolli Hills of Tamil Nadu to conserve soil and water on farmers’ fields, and with improved farm practices, there has been a reduction in migration to other states as labour. Improved and reliable income from farms and better resilience to climate-induced uncertainties will encourage more people to stay back in their villages.

As agricultural scientist and the former chairman of the National Commission on Farmers, MS Swaminathan wrote in Mongabay-India, if the dairy sector in India could develop a crisis-resilient structure for collecting milk from farms, adding value and converting it into products, a similar structure can be created for the procurement, value-addition, storage and marketing of fruits and vegetables.

If decentralised governance institutions can support agricultural marketing, then the farmers will be able to get a better price for the produce. For instance, the vegetable farmers of Thiruvallur in the outskirts of Chennai live almost totally at the mercy of the traders at the city’s wholesale market at Koyambedu.

The pull factors, however, are directly linked to the growth of the economy. Cities attract skilled and unskilled labour when the economy is growing, and shed them when it stops. The Indian economy was already in a path of deceleration when the Covid-19 pandemic struck.

An opportunity to calibrate

It is this migrant labour shedding activity that caused the crisis during the lockdown. As the lockdown opens, the hope is that the consumption cycles will restart and the economy will again pick up. This is where the hope about the good monsoon resulting in a good harvest and in turn improved rural consumption also comes in.

However, the kharif harvest is at least five months away, and uncertain. In urban centres, consumption is not likely to happen as expected since many families have lost jobs, businesses face an uncertain future, and there is an overall uncertainty for everybody. The lockdown has already disturbed the rabi harvest and procurement of crops and severely impacted the fisheries sector.

Thus this is the time when the governments and institutions may need to make money reach the hands of the people so that they can consume. Not as a dole, but as cash- or food-for-work schemes. This is the time to create assets that enhance environmental sustainability in villages and urban centres. While the money people spend can help build consumption, there is an opportunity to calibrate both the consumption levels and consumption for what purpose.

The asset creation in villages could be through watershed development, soil and water management structures, better seeds for improved crop productivity, etc. Similarly, in villages abutting forests, the assets created could be for helping with villagers’ biomass needs or preventing human-animal conflict. In urban areas, the assets could be used to create green spaces and reach reliable water supply to people.

The options can be many. But the point is that if uncontrolled consumption in a globalised, centralised system made the country vulnerable to the pandemic, then the pathway to reduce such shocks in future could be through economic growth that runs on moderated and decentralised consumption.

“When consumption becomes an end in itself, the situation gets skewed, as had been happening in the past decades in India.”

Consumption drives economic activity and economies. But when consumption becomes an end in itself, the situation gets skewed, as had been happening in the past decades in India. At a global level, India had procured manufactured goods from China and supplied its labour force to different parts of the world. Nationally, the same picture emerged, with goods and services being produced in clusters near cities, to which labour migrated from the hinterlands. When the lockdown happened the labour force was left high and dry.

The cities became centres of consumption. Though they continued to fuel economic growth, the urban dwellers were unaware of the ecological footprint of their actions. The environmental feedback loops are shorter and quicker in a rural setting than in the urban one. A consumer in Chennai wants water in her tap and is indifferent to the ecological cost of it being carried from the Krishna river hundreds of kilometres away, or to the economic cost of desalinating water from the sea. If the same consumer was living in a village she would be aware of the excess water pumping by her neighbour since it would affect the level in her well.

Revolutionary change

The novel coronavirus is revolutionary. Though unseen, it could force changes in attitudes and behaviour that would have otherwise needed a social revolution. It brought back trust in expert opinion in the country.

The expertise on how to manage the local natural resources lies with decentralised panchayats and their BMCs. Respecting their nuanced understanding of their terrain, while supporting it with science and government schemes (such as the Swachh Bharat Mission and Green India Mission), could be a way to strengthen the self-reliance of villages and reduce migration.

There is no guarantee that the infection may not recur again and another or many more lockdowns may be needed. There could even be another different microbe that causes a similar pandemic in the future. If India uses the opportunity of Covid-19 and makes structural changes to the recovery, then the future lockdowns could become more equitable than the present one.

This post first appeared on Mongabay-India. We welcome your comments at ideas.india@qz.com.

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